Informative Masterclass
How to Protect your Family’s Assets and Leave a Lasting Legacy
Save Your Spot Now!

White Plains & New City, New York Estate Planning & Elder Law Firm

Should I Consider a Reverse Mortgage ?

July 2, 2021
David Parker, Esq.
Co-op and transferring to the kids
David Parker, White Plains and New City NY Estate Planning Attorney
David Parker, Esq.
David Parker is an attorney who specializes in Estate Planning and Elder Law and has been practicing law for 30 years. Be it Wills, Trusts, Powers of Attorney, Health Care Proxies, or Medicaid Planning, David provides comprehensive and caring counsel for seniors and their families. A large portion of David’s practice is asset protection strategies so that families do not lose their hard earned savings to nursing home care costs. He also handles probate administration for the settlement of estates.
Reverse mortgages continue to be one of the most misunderstood retirement and long-term planning tools. Many myths surround the reverse mortgage program.

In the current real estate market around the country, property values continue to go up. Appraisals are also coming in higher. This means that seniors may be able to get more funds from a reverse mortgage.

If you already have a reverse mortgage, you may want to look into refinancing the loan.

Patch’s recent article entitled “Is A Reverse Mortgage Right for You?” explains that such mortgages permit homeowners who are at least 62 to borrow money on their house. The homeowner gets money from the lender based largely on the value of the house, the age of the borrower and current interest rates. The loan doesn’t need to be paid back until the last surviving homeowner dies, sells the house, or moves out permanently. Homeowners can use money from a reverse mortgage to pay for improvements to their home, to let them wait to claim Social Security, or to pay for home health care.

The most widely available reversable mortgage product is the Home Equity Conversion Mortgage (HECM). This is the only reverse mortgage program that’s insured by the Federal Housing Administration (FHA). The national limit on the amount a homeowner can borrow is $822,375.

Seniors with more expensive homes have an increased chance to get a jumbo reverse mortgage to raise cash for retirement. When the previous housing market improved, these jumbos were in high demand.

High end borrowers must look at a jumbo. This type of loan has no loan limits. Jumbos let a senior borrow millions of dollars. In fact, qualified borrowers can borrow up to $4 million in loan proceeds.

Reverse mortgages are "non-recourse" loans. This means that even if the house eventually sells at a price below the amount of the mortgage, the seller never owes more than the value of the home.

The amount of money seniors can qualify for, is based on their age and the home value. The older they are, the more money for which they can qualify.

A big reason to use a these mortgages are to pay for home care to stay out of a nursing home. By using this mortgage to pay for home care, a senior may not be required to use their own retirement accounts, which can jeopardize their ability to pay for future healthcare needs.

A reverse mortgage may not be best for everyone. Consult with an experienced elder law attorney about whether a reverse mortgage is right for you.

Reference: Patch (June 1, 2021) “Is A Reverse Mortgage Right For You?”


Share This Post
Stay Informed
Subscribe To Our FREE Estate Planning, Probate and Elder Law Newsletter

Book Your Free Initial Consultation With Parker Law Firm Today
Get Started Now

The 15 minute initial phone call is designed as a simple way for you to get to know us, and for our team to learn more about your unique estate planning needs.

Book an Initial Call
Book A Call With Parker Law Firm
Parker Law Firm
White Plains Location

222 Bloomingdale Rd #301,
White Plains, NY 10605

New City Location

120 North Main Street, Suite 203,
New City, NY 10956

IMS - Estate Planning and Elder Law Practice Growth Advisors
Powered by